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  • Writer's pictureMike Paterson

Greenback in retreat again

Tuesday 28 May 2024

Ongoing risk appetite has seen further losses in the US Dollar with FX pairs underpinned by the JPY supply still as USDJPY continues to hold 156.60 in the retreats. Month-end flows in play now too.

Data releases are minimal but we do have a few CB speakers including Fed heads Kashkari, Daly and Cook.  Ukraine/Russia war and Middle East tensions sadly still cast their own very large shadow. Remember as always to identify your preferred risk reward levels and let the algos do their thing along with the natural and speculative flows especially in days like today with thin liquidity. Don't get greedy or over-analyse.

Equities rallied yesterday amid better risk appetite and steady in Asia/early Europe and remain underpinned overall albeit with profit-takers still lurking as the CB second-guessing continues. WTI held $78.00 once broken then then $78.30-50 and now testing $78.80-00 amid the ongoing variables. Gold remains between $2335-55 with some understandable profit taking continuing as I've been warning but appetite for the shiny stuff in the dips remains.

GBPUSD: Holding 1.2730-50 yesterday and a steady really on the USD supply/GBPJPY demand double whammy but capping at  1.2785 so far. Some rally re-sells duly placed per ongoing strategy. EURGBP: Capping around 0.8520 amid the general GBP demand but holding around 0.8500 still as the ECB/BOE rate cut conjecture and cross flows continue. GBPJPY: Finally breaking up through the heady highs of 200 this time amid the general JPY supply before capping into 200.50. Sellers will remain poised in these fickle markets but I'm still expecting dip demand too as I've been warning.

EURUSD: Holding 1.0860 once broken amid the USD supply and EURJPY demand but capping at the old 1.0880 resistance as we continue to range tightly. I remain a rally seller as my preferred side.USDJPY: Support coming in at 156.60 again amid the better-risk JPY supply but capping into 157.00 again too. Some intervention previously up here should help cap but dip demand expected still.

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